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New scam -- Sellers beware

Posted by xine (My Page) on
Sun, Apr 18, 10 at 22:31

My friend has had her house on the market in northern Florida for about 6 months. They have lowered the price several times and finally received a full price offer about 6 weeks ago. The buyer's RE agent said they were Japanese nationals being transferred to the US and that their company would be paying for the house. They offered $10k in earnest money deposit. Unfortunately, this is where it unravels. The earnest money was never sent... The seller's RE agent called the company in question (accounting dept) and was told they didn't know anything about this transaction. The agent chalked it up to HR not telling Acct about it yet.

Meanwhile, the sellers are packing and getting ready to move, since the buyers wanted closing to be 3 weeks after contract, and it was a cash deal, so no financing to slow things down.

After a week of stalling on the buyer's agent's part about the earnest money ("it's coming... they're transferring the entire amount, not just the 10k"...), the seller (my friend) called their bluff. Turns out the buyers never really existed, the house was never shown by the supposed buyer's agent, and it was all a scam to get account numbers.

Sigh. What is this world coming to?


Follow-Up Postings:

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RE: New scam -- Sellers beware

Beware indeed.

Money should never be transferred into a seller's account a) prior to closing or
b) by anyone other than the closing agency (title company or attorney's office).

When a buyer does transfer money, the title company does *not* disclose its account number to the buyer;
the title company will give the buyer's *bank* wiring instructions.


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RE: New scam -- Sellers beware

Just curious--as this appears to be a scam, shouldn't the agency loose their license to sell/buy in the US??
And what is the board of realtors/state doing and law enforcement as this appears to be a identity theft problem. I would be very unhappy with all.


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RE: New scam -- Sellers beware

Um, how exactly was this scam supposed to work? What account numbers would the seller be providing to the buyer or the buyer's agent? This doesn't make any sense to me.


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RE: New scam -- Sellers beware

I don't get this 'scam'. This story is missing something and makes no sense to me either.


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RE: New scam -- Sellers beware

I agree with the above.


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RE: New scam -- Sellers beware

I don't think the agent was a part of the scam;
it sounds like the agent was a dupe.

Buyer calls, says I want to buy this house, will you write the contract, etc.

Agent writes contract, thinks everything is fine.

Then buyer says, sure, I'll transfer the money directly into seller's account;
I just need the account numbers to give to my bank.


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RE: New scam -- Sellers beware

Hasn't anyone heard of electronic funds transfer? No account numbers needed.

Maybe over the years I've been a real estate broker, mortgage lender, landlord too long. But I figure everyone's out to scam me and act accordingly. Like the boxing referees advise the pugilists at the start of every fight," Protect yourself at all times."


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RE: New scam -- Sellers beware

What's the point of this Beware message really? I don't know any realtor who just doles out his/her client's bank account information as is being described here. It's pure nonsense - This is some kind of scam all right!


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RE: New scam -- Sellers beware

The OP has been posting on these forums for years and is relating a story of what happened to a friend.

Maybe the scam was to get the real estate agency's account numbers.


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RE: New scam -- Sellers beware

Yes, I think it was to get either the seller's or title company's account number (from the wire transfer). I don't have all the details on exactly how the transaction was supposed to work.

As for not using account numbers in a wire transfer, how else are you supposed to do it? I just sold my house and had the proceeds wired to my account, and had to provide the title agency (closing agent) my account number and routing number.

The "beware" part wasn't necessarily to protect your account number... it was to ensure that your buyers are on the up and up and that the real estate agents have proof of funds letters from legitimate sources, etc. I'd hate to see someone else go through the emotional angst that my friend went through thinking you've sold your house and prepping to move, only to find it wasn't true.

My friend and her agent have contacted law enforcement and the local RE board about this. I don't know the status of those contacts.

(For those who think me posting this was some sort ridiculousness, sooooo sorry. I was just relaying a story about my friend and what happened to her. If it can help someone -- great! If it doesn't pertain to you -- just move on.)


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RE: New scam -- Sellers beware

"Hasn't anyone heard of electronic funds transfer? No account numbers needed."

Not correct.

To wire or transfer money from one account to another you need BOTH account numbers.

When you pay bills you give the receiver YOUR account number (and bank routing information).
They already know theirs and fill it in on the actual request sent to your bank.

Having the account number means that attempts can be made to transfer money OUT of the account to another account.

Every person you give a check to (paper or 'electronic funds transfer') has a lot of information that they could misuse to try and pull funds from your checking account.

Before international banking it was rare since it was easy to trace the account the funds went into.
That is not as reliable know as a safeguard.


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RE: New scam -- Sellers beware

As for not using account numbers in a wire transfer, how else are you supposed to do it?

"Hasn't anyone heard of electronic funds transfer? No account numbers needed."
Not correct.

Okay, here it's called e*mail transfer. I use it for sending and receiving funds all the time. Most of the major Canadian banks participate for sending funds. But all Canadian banks can be accessed for the recipient. Maybe someday our little bros to the south can participate! :-)


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RE: New scam -- Sellers beware

Ffromthe e*mial transfer site:

"An email message tells the recipient that the money is ready. If the recipient collects the money through online banking with a participating financial institution1, the transfer takes place instantly. "

I wold bet that the recipient has to supply account numbers to actually get the money credited to an account.

The sender already supplied the account number to the bank for the source of funds.

Banks are not going to allow their account numbers to be replaced by email addresses.


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RE: New scam -- Sellers beware

I wold bet that the recipient has to supply account numbers to actually get the money credited to an account.

AS the recipient, you only "reveal" your numbers to your own bank. Same for the sender. I've been both a sender and a recipient. It's instant and sure beats waiting for snail mail or driving around to pick up or deliver cheques.


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RE: New scam--followup

Do both the recipient and sender banks know both account numbers? I expect so. Same as with cheque payment. But if you're not ok with the banks knowing them, then maybe one should stick to cash and cigar boxes.


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RE: New scam -- Sellers beware

You would be surprised how much and how easy it is to find any and all information about a person. I get stuff in the mail and on the internet about products and companies asking me to buy something, calling me by my real name, listing emails, addresses that I have never contacted. I even get phone calls and I have a very unusual name so I know someone somewhere has been buying information from the internet. Don't forget all your income tax information is now stored in India and has been for several years.


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RE: New scam -- Sellers beware

A client of mine in the US used to wire me his mortgage payments via the SWIFT system of interbank transfers until one time the funds he wired never appeared. It took two months for the Bank of Boston to figure out that they had mistakenly sent his money to the wrong bank and account.

In the meantime, to avoid penalties, he drove the 1,000 miles across the border with the money stuffed into his pockets, guaranteeing sure forfeiture should any of the US constabulary have decided to stop and search him. Black guy in a shiny Lexus, wads of C notes in his jeans. What are the chances?


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RE: New scam -- Sellers beware

Xine, thanks for posting this. It sounds eerily familiar to what is going on with my parents house right now, with a few differences... buyer (an asian man with canadian citizenship who is working in Madrid) approached my parents agent and is buying the house sight unseen (there is a pretty detailed virtual tour and photos) with cash. His company is NOT buying the home for him, he's retiring and moving to the US. He did provide a bank statement with more than adequate funds to pay cash for the house, and the realtor did call and verify the balance in the account. He's also provided his Toronto drivers license, passport id, the social security card (whatever it is in Canada). Earnest money SHOULD hopefully arrive tomorrow to the realtor's office - but I've forwarded this story to them and they are forwarding to their realtor to be aware and stay on top of the earnest money situation! So thanks again!


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RE: New scam -- Sellers beware

The entire issue comes down to how who you trust to have your account numbers, and how much work the banks are willing to do to match things like email addresses to senders and receivers.

The security is not going to be any better than the folks moving the money around.

I would question if the banks have provided adequate spoofing (the sending of false messages).

The banking system and banks have been laggards in adopting and using any encryption technology.
The usual excuse is how to maintain security of the keys required (and there are now numerous techniques for key management as secure as the keys themselves).
This from folks who manage to maintain security on millions of $ in cash.


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RE: New scam -- Sellers beware

I'm not sure what all the hand wringing about account numbers is all about anyway. It's not like the info is a state secret. Whenever you write a check and give it to someone, you've just handed that person your name, address, account number, and bank routing number. Not to mention a copy of your signature for them to use to try to forge future documents.


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RE: New scam -- Sellers beware

Good point!

It also explains why lots of people limit themselves to cash and postal money orders/bank drafts. Of course, if you're actually handing over a product or service in exchange for any of the above, you have to verify them too.


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RE: New scam -- Sellers beware

"I'm not sure what all the hand wringing about account numbers is all about anyway. It's not like the info is a state secret. Whenever you write a check and give it to someone, you've just handed that person your name, address, account number, and bank routing number. Not to mention a copy of your signature for them to use to try to forge future documents."

All correct.

And all that needs to happen is for a less than honest person with access to the days receipts start using the numbers online to make purchases.

It is becoming a larger and larger problem.
While the banks will usually reverse the debits from your account, you will have to deal with all the secondary effects that can occur.

Other checks you have written can bounce.
Your mortgage company will NOT be happy.

It WILL take time and effort to get the mess straightened out like just about every identity theft case.

You would be surprised how fast things can occur if a dedicated thief gets what they need.


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